Assignment 1

Course Name: Strategic Management

Selected Company: HUL and P&G

Group No:11

Submitted By

Guruprasath
Pravin Khadse
Sridhar
Krishnamoorthy
Pramodh
Venkatraman
Karthick Vikram
 1. A full vision statement and mission statement is mentioned with a formal source for
both selected companies

Answer:

Definition: A mission statement defines the organization's business, its

objectives, and how it will reach these objectives. A vision statement details
where the organization aspires to go.

. Selected Companies: HUL and P&G

HUL - Hindustan Unilever Limited

Unilever’s mission statement and vision statement are a basic foundation for the success of
the company’s consumer goods business. The corporate mission statement indicates the
strategic approaches of the company. In Unilever’s case, the mission statement determines
how the business addresses the needs of its target consumers. On the other hand, the
corporate vision statement provides the development direction of the organization. Unilever’s
vision statement broadly presents what the company needs to do to succeed in the long
term. Considering the company’s position as one of the biggest consumer goods firms in the
world, Unilever’s mission statement and vision statement remain relevant and appropriate to
global market conditions.

Unilever’s Vision Statement

Unilever’s corporate vision is “to make sustainable living commonplace. We believe this is
the best long-term way for our business to grow.” This vision statement puts emphasis on
sustainability, especially among consumers. The following components are notable in
Unilever’s vision statement:

1. Commonplace sustainable living

2. Best long-term way
3. Business growth

Commonplace sustainable living is a core component in Unilever’s corporate vision

statement. This component shows the company’s efforts in changing its products to suit
current market conditions. For example, through sustainable design for home care and
personal care products, Unilever helps consumers reach their goals to integrate sustainability
in their lives. The corporate vision also states that commonplace sustainability is the best
long-term way for the business. Unilever understands the importance of sustainability and
other market trends shaping the industry. Moreover, the vision statement reflects the
company’s view of sustainability as a way to maintain business growth.

Unilever’s Mission Statement:

Unilever’s corporate mission is “to add vitality to life. We meet everyday needs for nutrition,
hygiene and personal care with brands that help people feel good, look good and get more
out of life.” This mission statement underscores how the company satisfies customers in
various aspects of their lives. The following are the significant components in Unilever’s
mission statement:

1. Adding vitality to life

2. Meeting everyday needs for nutrition, hygiene, and personal care
3. Helping people feel good, look good, and get more out of life

Adding vitality to life is a general indicator of business strategy in Unilever’s corporate

mission statement. Such vitality is the value that consumers can expect from the company’s
products. The corporate mission also specifies the aspects of life where such vitality is added.
For example, Unilever’s food products address consumers’ vitality needs in terms of nutrition

References

Unilever – Investor Relations – Annual Reports and Accounts Overview.

Ekpe, E. O., Eneh, S. I., & Inyang, B. J.). Leveraging Organizational Performance through
Effective Mission Statement. International Business Research, 8(9), 135.

King, D. L., Case, C. J., & Premo, K. M. Does Company Size Affect Mission Statement
Content Academy of Strategic Management Journal, 13(1), 21.

Kirkpatrick, S. (2016). Build a Better Vision Statement: Extending Research with Practical
Advice. Rowman & Littlefield.

P& G - Procter and Gamble

The Procter & Gamble Company (P&G) is a leading firm in the consumer goods market, directly
competing against Unilever, which is also a major player in the global industry (Read: Unilever’s
Vision Statement and Mission Statement). A firm’s vision statement describes the target future
situation of the business. In the case of Procter & Gamble, the corporate vision statement
emphasizes leadership in the global market. On the other hand, a company’s mission statement
specifies the strategic approach to fulfil the vision. Procter & Gamble’s corporate mission statement
highlights quality and value as the foundation for ensuring business success. The company’s growth
path and strategies in the consumer goods industry are based on this strategic approach to reach the
corporate vision. As a dominant firm in the market, Procter & Gamble needs to ensure that its vision
statement and mission statement are fulfilled. It is also necessary to consider possible adjustments
to these statements to address changes in market conditions and Procter & Gamble’s business needs
over time.

Procter & Gamble’s Vision Statement

Procter & Gamble’s vision statement is “Be, and be recognized as, the best consumer
products and services company in the world.” In this corporate vision, the term “best”
characterizes what the company aims to achieve in the global consumer goods market. This
factor indicates how the Procter & Gamble Company sees itself relative to other firms in the
industry. In addition, the term describes the capabilities and potential of the business
organization. In this regard, the corporate vision statement highlights the following
characteristics relevant to Procter & Gamble and its business condition:
 1. Be the best consumer products and services company
2. Be recognized as the best consumer products and services company
3. Global market operations

The first characteristic of Procter & Gamble’s vision statement requires steps that ensure the
company’s leadership in the consumer goods industry. P&G does not specify the criteria for
determining the “best” position. However, typical considerations to achieve industry leadership
include quality and value of products, quality of customer service, and corporate responsibility status,
among others. The second feature of Procter & Gamble’s corporate vision statement focuses on
recognition. Such recognition requires strategic objectives that involve marketing management,
among others

Procter & Gamble’s Mission Statement:

Procter & Gamble’s mission statement is “We will provide branded products and services of
superior quality and value that improve the lives of the world’s consumers, now and for
generations to come. As a result, consumers will reward us with leadership sales, profit
and value creation, allowing our people, our shareholders and the communities in which
we live and work to prosper.” This corporate mission contains a detailed specification that
influences Procter & Gamble’s strategic direction. Superiority in quality and value are
emphasized, just as these factors are also highlighted in the company’s vision statement.
Procter & Gamble’s corporate mission statement has the following characteristics:

1. Branded products and services of superior quality and value

2. Improve the lives of the world’s consumers, now and for generations to come
3. Leadership sales, profit and value creation
4. Prosperity of people, shareholders and communities

The mission statement requires that the Procter & Gamble Company must ensure the superior
quality and value of its products. Based on this characteristic, a strategic objective is to
continue enhancing the company’s products to maintain superior quality and value. For
example, Procter & Gamble must always innovate and ensure adequate R&D investment for
product development as an intensive growth strategy

References

Ekpe, E. O., Eneh, S. I., & Inyang, B. J. Leveraging Organizational Performance through Effective
Mission Statement. International Business Research, 8(9), 135.

King, D. L., Case, C. J., & Premo, K. M. Does Company Size Affect Mission Statement Content?
Academy of Strategic Management Journal, 13(1), 21.

Kirkpatrick, S. (2016). Build a Better Vision Statement: Extending Research with Practical Advice.
Rowman & Littlefield.

The Procter & Gamble Company – Who We Are.

The Procter & Gamble Company, Form 10-K.

Von Dewitz, A. VAUDE: Sustainable Value Creation as a Corporate Mission Statement for Small and
Medium-Sized Companies. In Sustainable Value Chain Management (pp. 261-274). Springer
International.

2. Report its profitability based on the annual report and explain what you understand from
it? Also, provide a formal source of reference for the Annual Report. (For both the
companies - selected pair) 

Answer:

Hindustan Unilever Limited

Based on the annual report mentioned above Hindustan Unilever Limited Company is
getting profit for the year as Rs 8,818 crores whereases the same was Rs 7,954 crores last
year so the Company is in a good position

Resource: Hindustan Unilever Limited | Integrated Annual Report 2021-22

Based on the annual report mentioned above Procter & Gamble Company is getting profit for
the year as Rs 14,352 crores whereases the same was Rs 13,027 crores last year so the
Company is in a good position

Resource: The Procter & Gamble Company Annual Report 2020-21

3. For the selected pair of company, identify two key resources

(tangible/intangible/ human) for each. Justify your answer.

Answer:

The Key resources of any company are as follows

.
 Input materials.
 Financial resources.
 Intangible assets.
 Tangible assets.
The two Key resources are intangible and tangible assets because the input
materials will obviously there and it is a much needed one for getting good amount of
profit and financial resources will be also there but intangible and tangible assets
are two key resources.

Tangible assets are as follows:

A) Owned Assets

Property, plant and equipment is stated at acquisition cost net of accumulated depreciation
and accumulated impairment losses, if any. Cost of acquisition or construction of property,
plant and equipment comprises its purchase price including import duties and non-refundable
purchase taxes after deducting trade discounts, rebates and any directly attributable cost of
bringing the item to its working condition for its intended use. Property, plant and equipment
acquired in a business combination are recognised at fair value at the acquisition date. When
parts of an item of property, plant and equipment having significant cost have different useful
lives, then they are accounted for as separate items (major components) of property, plant and
equipment. Subsequent costs are included in the asset’s carrying amount or recognised as a
separate asset, as appropriate, only when it is probable that future economic benefits
associated with the item will flow to the Company and the cost of the item can be measured
reliably. All other repairs and maintenance cost are charged to the standalone statement of
profit and loss during the period in which they are incurred. Gains or losses arising on
retirement or disposal of property, plant and equipment are recognised in the standalone
statement of profit and loss. Property, plant and equipment which are not ready for intended
use as on the date of Balance Sheet are disclosed as “Capital work-in-progress”. Advances
paid towards the acquisition of property, plant and equipment outstanding at each balance
sheet date is classified as capital advances under “Other Non-Current Assets”. Depreciation is
calculated on pro rata basis on straight-line method based on estimated useful life prescribed
under Schedule II of the Companies Act, 2013. Freehold land is not depreciated.
B) Leased Assets:

The Company’s lease asset classes primarily consist of leases for Land & Buildings, Plant &
Equipment, Furniture & Fixtures and Office equipment. The Company assesses whether a contract is
or contains a lease, at the inception of a contract. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to control the use of an identified
asset, the Company assesses whether:

(a) The Company incurred `65 crores for the year ended 31st March, 2022 (31st March, 2021: `83
crores) towards expenses relating to short-term leases and leases of low-value assets. The total cash
outflow for leases is `527 crores for the year ended 31st March, 2022 (31st March, 2021: `547
crores), including cash outflow of short-term leases and leases of low-value assets. Interest on lease
liabilities is `75 crores for the year ended 31st March, 2022 (31st March, 2021: `81 crores).

(b) The Company’s leases mainly comprise of land and buildings, plant, equipment, furniture and
fixtures and office equipment. The Company leases land and buildings for manufacturing and
warehouse facilities.

(c) The title deeds of certain Leasehold Land and Building are in the process of perfection of title.
Details of such leasehold land and building are as follows:

Intangible assets are as follows:

A) GOODWILL AND OTHER INTANGIBLE ASSETS:

Intangible assets purchased are initially measured at cost. The cost of an intangible asset comprises
its purchase price including duties and taxes and any costs directly attributable to making the asset
ready for their intended use. Intangible assets acquired in a business combination are recognised at
fair value at the acquisition date. Subsequently, intangible assets are carried at cost less any
accumulated amortisation and accumulated impairment losses, if any. Subsequent expenditure is
capitalised only when it increases the future economic benefits embodied in the specific asset to
which it relates. All other expenditure is recognised in standalone statement of profit or loss as
incurred. The useful lives of intangible assets are assessed as either finite or indefinite. Finite-life
intangible assets are amortised on a straight-line basis over the period of their estimated useful
lives. Estimated useful lives by major class of finite-life intangible assets are as follows: Design and
Know-how - 10 years Computer software - 5 years Trademarks - 5 years Distribution network - 15
years The amortisation period and the amortisation method for finite-life intangible assets is
reviewed at each financial year end and adjusted prospectively, if appropriate. Indefinite-life
intangible assets comprise of trademarks and brands, for which there is no foreseeable limit to the
period over which they are expected to generate net cash inflows. These are considered to have an
indefinite life, given the strength and durability of the brands and the level of marketing support. For
indefinite-life intangible assets, the assessment of indefinite life is reviewed annually to determine
whether it continues, if not, it is impaired or changed prospectively basis revised estimates. Goodwill
is initially recognised based on the accounting policy for business combinations and is tested for
impairment annually.

B) Impairment:

Assessment for impairment is done at each Balance Sheet date as to whether there is any indication
that a non-financial asset may be impaired. Indefinite life intangible assets are subject to review for
impairment annually or more frequently if events or circumstances indicate that it is necessary. For
the purpose of assessing impairment, the smallest identifiable group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows from other assets or
groups of assets is considered as a cash generating unit. Goodwill acquired in a business combination
is, from the acquisition date, allocated to each of the Company’s cash generating units that are
expected to benefit from the synergies of the combination, irrespective of whether other assets or
liabilities of the acquiree are assigned to those units. If any indication of impairment exists, an
estimate of the recoverable amount of the individual asset/cash generating unit is made. Asset/cash
generating unit whose carrying value exceeds their recoverable amount are written down to the
recoverable amount by recognising the impairment loss as an expense in the standalone statement
of profit and loss. The impairment loss is allocated first to reduce the carrying amount of goodwill (if
any) allocated to the cash generating unit and then to the other assets of the unit, pro rata based on
the carrying amount of each asset in the unit. Recoverable amount is higher of an assets or cash
generating unit’s value in use and its fair value less cost of disposal. Value in use is estimated future
cash flows expected to arise from the continuing use of an asset or cash generating unit and from its
disposal at the end of its useful life discounted to their present value using a post-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining fair value less costs of disposal, recent market transactions are considered. If
no such transactions can be identified, an appropriate valuation model is used. Assessment is also
done at each Balance Sheet date as to whether there is any indication that an impairment loss
recognised for an asset in prior accounting periods may no longer exist or may have decreased. Basis
the assessment a reversal of an impairment loss for an asset other than goodwill is recognised in the
standalone statement of profit and loss.

Resource: Hindustan Unilever Limited | Integrated Annual Report 2021-22

Procter & Gamble

A) Property, Plant and Equipment:

Property, plant and equipment is recorded at cost reduced by accumulated depreciation.

Depreciation expense is recognized over the assets' estimated useful lives using the straight-line
method. Machinery and equipment include office furniture and fixtures (15-year life), computer
equipment and capitalized software (3- to 5-year lives) and manufacturing equipment (3- to 20-year
lives). Buildings are depreciated over an estimated useful life of 40 years. Estimated useful lives are
periodically reviewed and, when appropriate, changes are made prospectively. When certain events
or changes in operating conditions occur, asset lives may be adjusted and an impairment assessment
may be performed on the recoverability of the carrying amounts.

B) Goodwill and Other Intangible Assets:

Goodwill and indefinite-lived intangible assets are not amortized, but are evaluated for impairment
annually or more often if indicators of a potential impairment are present. Our annual impairment
testing of goodwill is performed separately from our impairment testing of indefinite-lived intangible
assets. We have acquired brands that have been determined to have indefinite lives. We evaluate a
number of factors to determine whether an indefinite life is appropriate, including the competitive
environment, market share, brand history, underlying product life cycles, operating plans and the
macroeconomic environment of the countries in which the brands are sold. In addition, when certain
events or changes in operating conditions occur, an additional impairment assessment is performed
and indefinite-lived assets may be adjusted to a determinable life. The cost of intangible assets with
determinable useful lives is amortized to reflect the pattern of economic benefits consumed, either
on a straight-line or accelerated basis over the estimated periods benefited. Patents, technology and
other intangible assets with contractual terms are generally amortized over their respective legal or
contractual lives. Customer relationships, brands and other non-contractual intangible assets with
determinable lives are amortized over periods generally ranging from 5 to 30 years. When certain
events or changes in operating conditions occur, an impairment assessment is performed and
remaining lives of intangible assets with determinable lives may be adjusted.

Resource: The Procter & Gamble Company Annual Report 2020-21